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Smart Ways of Financing Commercially Viable Projects When the Cash is Scarce

Companies / SME Mar 28, 2022 - 09:44 PM GMT

By: Steve_Barker

Companies

It's no secret that cash flow is often the biggest hurdle for businesses looking to get their projects off the ground. Commercial viability is key, but if you can't find a way to finance your venture, it'll never see the light of day. In this article, we'll discuss some smart ways to finance your project when money is tight.


Loans

Loans can be a viable way to finance your business in the UK. There are many different types available (including small business loans), and the terms and conditions can vary greatly. It's important to shop around and compare different lenders before you decide on a loan. Also, it's wise to speak to a loan specialist so they can use their expertise to find you the most suitable deal.

Bridging loans are a type of short-term finance that can be used to 'bridge the gap' between two financial transactions. The people dealing with Bridging Options demonstrate the popularity of bridging loans for residential or commercial purposes, or those seeking help with development finance or auction finance. People want independent bridging loans from leading lenders, fast turnaround, and no exit fees.

Grants

Small businesses in the United Kingdom can apply for a number of grants to help with things like the costs of equipment, premises, training, and marketing. The government offers a range of grants for small businesses, including the Enterprise Investment Scheme (EIS) and the Growth Fund. These schemes provide funding for businesses that are able to create jobs and grow the economy.

In addition to government grants, there are also a number of private sector organizations that offer grant funding for small businesses. They include banks and foundations.

Equity Financing

This is the process of raising capital by selling shares in your company to investors. This can be done through a variety of equity crowdfunding platforms, such as Seedrs and Crowdcube. This option allows you to raise capital without taking on debt. Another benefit of equity financing is that it can help you build relationships with potential customers and partners.

There are a few things to keep in mind if you’re considering this option, however. First, equity investors will want a say in how the company is run. Second, equity financing can dilute the ownership stake of existing shareholders. Finally, equity investors may expect a higher return on their investment than debtors, so be sure to weigh the pros and cons before making a decision.

Crowdfunding

This is the use of small amounts of capital from a large number of individuals to finance a new business venture. It's become a popular way to raise money for small businesses and startups, as it allows entrepreneurs to tap into a larger pool of potential investors. One of the most popular crowdfunding platforms is Kickstarter, which has helped fund thousands of projects since its launch. Kickstarter allows entrepreneurs to set up a profile for their business and offer rewards to backers in exchange for their investment.

Another popular crowdfunding platform is Indiegogo. No matter what type of crowdfunding platform you choose, make sure you do your research and create a well-thought-out campaign before asking for people's hard-earned money. Crowdfunding is a great way to finance commercially viable projects when the cash is scarce, but only if it's done right.

Angel Investors And Venture Capitalists

If you have a solid business plan and some early traction, you may be able to interest an angel investor in providing seed funding for your company. Angel investors are typically high-net-worth individuals who are looking for high-growth investments, so it’s important to have a good story and some solid numbers to back up your request.

If you’re looking for a larger amount of funding, you may be able to interest a venture capital firm in investing in your company. Venture capitalists are typically looking for companies that have the potential to generate a lot of revenue, so again, you’ll need to have a strong business plan and some proof of concept before approaching them.

Miscellaneous Options

Here are some possible choices for you:

  1. Speak to your bank about overdrafts and lines of credit
  2. Borrow from friends or family members because you wouldn't need to pay interest on your loan. Only pursue this option if you can definitely repay the money within a pre-agreed timescale, or you could fall out!
  3. Raise some extra money by selling something or making some sacrifices. Forego a holiday, sell a second car, take up a side hustle or rent out one of your rooms.

As you can see, there are many ways you can find the money that you need for your commercially viable project. Be sure to do your homework in advance so that the chosen method serves your purpose rather than creates problems. If you choose wisely, it could be the right tool for your company, and be the springboard to your future success.

By Steve Barker

© 2022 Copyright Steve Barker - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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